Review launched into the future of the licence fee and
alternative funding options, supported by a panel of leading
industry experts
Comes as government intervenes to minimise increases to
the cost of the TV licence fee for households
Next year’s licence fee will be £20 cheaper than it would
have been had the government not acted
A review into how the BBC should be funded in the future has been
launched by Culture Secretary , as new action is taken to
reduce the impact of price rises on licence fee payers.
The review, supported by a panel of independent experts soon to
be announced from across the broadcasting sector and wider
business world, will assess a range of options for funding the
BBC. It will look at how alternative models could help secure the
broadcaster’s long-term sustainability amid an evolving media
landscape, increased competition and changing audience behaviour,
while reducing the burden on licence fee payers.
As set out in the terms of reference published
today, the review will explore the sustainability of the BBC’s
current licence fee model, and build an evidence based
understanding of alternative models for funding the BBC. The
review will be supported by analysis which will include
externally commissioned research.
The licence fee will also rise by less than previously expected
next year following changes brought in by the government to
minimise the cost to households. In 2022, the government froze
the licence fee for two years to protect families from the sharp
rise in the cost of living. It was agreed that the current annual
fee of £159 would remain unchanged until April 2024, before
rising by inflation for the following four years.
However, in recognition of the ongoing cost of living pressures
faced by families, the government has today decided to change how
the inflation-linked uplifts to the licence fee are calculated
for 2024.
This means the annual cost of a TV licence will be £169.50 from
April 2024 - the equivalent of an additional 88p per month.
The previous methodology for calculating inflation was the
averaged annualised October to September CPI figure of 9 per
cent. The new methodology for 2024 uses the annual rate of CPI in
September 2023 of 6.7 per cent, and is the approach used to
calculate uplifts to benefits.
As a result of today's announcement and the two-year freeze, from
April next year the annual licence fee will be more than £20
cheaper than it would have been had the government not acted. By
the end of 2024, licence fee payers will have saved £37 since
2022 due to the measures.
The decision will ensure the additional cost to licence fee
payers is kept as low as possible while giving the BBC over £3.8
billion in annual licence fee funding to spend on world leading
content and deliver on its mission as set out in the Charter: to
serve all audiences with impartial, high-quality and distinctive
output and services which inform, educate and entertain. It will
also ensure S4C can maintain its unique role promoting the Welsh
language and supporting our wider public service broadcasting
landscape.
Culture Secretary said:
“This is a fair deal that provides value for money for the
licence fee payer while also ensuring that the BBC can continue
to produce world leading content.
“We know family budgets are stretched, which is why we have
stepped in again – following two years of licence fee freezes –
to reduce this year’s increase to less than a £1 a month.
“But this settlement has highlighted other challenges faced by
the BBC with the changing media landscape making the battle for
audiences more competitive and the number of people paying the
licence fee decreasing. This raises fundamental questions as to
sustainability of the current licence fee system.
“So we are also launching a funding review of the BBC that will
take a forensic look at the licence fee, and whether a reformed
funding model could better support our national broadcaster to
remain sustainable and affordable for audiences while driving
growth in our creative industries. I want a thriving BBC,
supported to inform, educate and entertain and this funding
review will help us make sure we can deliver this for decades to
come.”
This announcement follows an additional £20 million the
government awarded to the BBC World Service earlier this year as
part of the refresh of the Integrated Review. The money, which is
on top of £94 million provided annually, was to protect all 42
World Service language services over the next two years, support
English-language broadcasting, and counter disinformation.
The findings of the Funding Model Review will feed into the
review of the BBC’s Royal Charter ahead of its expiry at the end
of 2027. Any public consultation and final decision on the BBC’s
funding model will be reserved for Charter Review itself.
***ENDS***
Notes to editors
-
An announcement of the membership of the expert panel for the
Licence Fee Review will follow in due course. The panel will
incorporate a broad range of views from experts in the
broadcasting sector.
-
The black and white TV licence fee will increase from £53.50
to £57.
